PH telecoms not only the lousiest, but also the most expensive

Third of a 7-part series
TELECOM services in our country are not only the lousiest in Southeast Asia, but also the most expensive. This is according to the latest data from the authoritative International Telecommunications Union, a United Nations specialized agency.

If the telecom monopoly consisting of PLDT and Globe Telecom provides the poorest service at the most expensive rates, no wonder these foreign-controlled companies are the country’s most profitable firms, easily beating the SM mall conglomerate, San Miguel Corp., and the Gokongwei industrial group.*

From 2005 to 2016, the monopoly’s super-profits totaled a whopping $9 billion, or P405 billion. To help you wrap your mind around that figure, PLDT and Globe have been making P100 million for each day of the past 12 years.

Of course, we don’t have a right to complain about how much capitalists make. But in this case, they are operating a public utility with a captive market, involved in public service that they’re making super-profits from.

Government is supposed to regulate them to make sure they put priority not on profits but on service, or at least put these on the same level. But who’s even heard of the nearly inutile National Telecommunications Commission? At least President Duterte realized something might be wrong in having the ICT department headed by a longtime Globe lawyer.

TEXTING A MUST: PLDT and Globe are making hundreds of billions of pesos from Filipinos like this rice farmer.

Telecoms is becoming an important cost for business as well as a base for economic growth. An ITU study of 120 developed countries from 1980 to 2002 showed that a 10 percent increase in broadband (Internet access) penetration produced a 1.1 percent increase in GDP growth.

Other than the obvious infrastructure needed, the affordability of Internet service is the most important factor for the spread of Internet use. How can we increase the number of Filipinos with access to the Internet, if it is so expensive? Believe me: In this country, if you require a decent Internet service with its speed never going below 5 Mbps, you’d need to shell out at least P4,000 per month.

Cellphone use has become, by necessity or culture, a mass must-have service in this country, nearly as essential as electricity. Think how many of our poor have to part with their meager incomes, lured by fraudulent promotional tricks, just to generate super-profits not only for our richest but also for foreign billionaires, like the Indonesian tycoon Anthoni Salim, the biggest stockholder of PLDT.

While the ITU provides data on the dollar-values of countries’ telecoms costs, the most useful measure that most accurately depicts how expensive our telecoms services are, is the price of each type of service as a percentage of a country’s gross national income (GNI) per capita per month, very roughly the average earnings of Filipinos per month.

If Internet service here is equivalent to 7.5 percent of our monthly gross national income per capita, while in Singapore it is just 0.2 percent, then clearly our broadband cost is more expensive than that of that wealthy city-state.

The accompanying table contains the ITU data for 2015. It shows that telecom service in our country is the most expensive among major Asean countries for mobile cellular use, fixed broadband (for accessing the Internet), and mobile broadband postpaid service. Only for our mobile broadband prepaid cost is ours cheaper than that of war-ravaged Vietnam.

We should be outraged by this data. Prices here for mobile-cellular services are 17 times (measured as a percentage of the gross national income per capita) than those of Singapore, where the dominant telco is Singtel— which is the biggest shareholder of Globe Telecom.

For fixed broadband, it is 12.5 times; for mobile broadband prepaid 7.5 times, and for mobile broadband postpaid, it is an astounding 22 times. Except for fixed broadband, prices here for other telecom services —which is dominated by PLDT, controlled by the Indonesian Salim—is more expensive than those in his home country.

Read the table and weep. Singapore has the cheapest Internet service, the Philippines has the most expensive. Yet Singapore has the fastest Internet speed, ours the slowest.

Another way of looking at the data (and getting depressed) is to note how many countries in the ITU’s list of 184 countries provide cheaper telecom services than us.

For mobile cellular prices, there are 120 countries in the world that have cheaper rates than us: for fixed broadband, 125 other countries; and mobile broadband postpaid, 130 nations. It is depressing that Internet service here is more expensive than those in poorer countries like Vietnam, Pakistan, Yemen, Sudan, Bangladesh and Bolivia.

And to think that foreign companies control and own more than 70 percent of PLDT and Globe.

Why do we allow this?

*Details of these are in my past two articles: “Jack Ma would have been shocked at ou telecoms industry” (October 27, 2017), and “Why our telecoms will never be world-class with this kind of telco owners” (October 30, 2017).